China's decision to delay greater democracy in Hong Kong appears to be the result of deep-seated concerns about national stability, security and preserving economic prosperity.

Analysts say Beijing is worried full democracy in Hong Kong could threaten everything from China's economic growth to the success of the 2008 Olympics.

Some suggest this is why China highest lawmaking body, the standing committee of the National People's Congress, recently ruled that the territory's residents could not directly elect their next leader in 2007. Furthermore, Hong Kong people will not be allowed to directly elect their entire legislature in 2008.

When Hong Kong was handed back to China from Britain in 1997, some interpreted the post-colonial constitution as suggesting that Hong Kong people would be able to directly elect their chief executive by 2007, and their lawmakers by 2008.

Political scientist Michael DeGolyer of Hong Kong's Baptist University says China is slowing down Hong Kong's transition to democracy because it wants to maintain the status quo in the run-up to the 2008 Beijing Olympics, which are very important to the prestige of the Communist Party leadership.

"Certainly there's a great deal of concern about events in China," he says. "The folks in Beijing want to do everything possible to avoid instability that would bring about the failure of the Beijing Olympics."

Mr. DeGoyler says China's leaders believe that more democracy in Hong Kong could spark demands for greater freedom across the border, leading to public demonstrations or even clashes with police that would embarrass Beijing. He says China also believes public demonstrations could damage Hong Kong and China's economic growth.

Donald Tsang, Hong Kong's Chief Secretary and its second most powerful figure, says it is not just officials in Beijing who are concerned. He says many people in Hong Kong, including the territory's business elite, fear democracy could harm business.

Mr. Tsang makes this point as part of the administration's drive to get Hong Kong people to accept the NPC ruling as fair. "On the question of universal suffrage. There exists wide divergent views in the Hong Kong community," he says. "I think this reason was stated quite clearly in the NPC standing committee [decision]."

But Audrey Eu, an independent lawmaker in Hong Kong's legislature, says Beijing's concerns also encompass the notion that under democracy, foreign powers could influence Hong Kong. They might, for example, urge the territory to declare independence or use the territory to destabilize the rest of China.

"The mainland leaders fear that Hong Kong would be controlled by a foreign power - and that we are in a mob-like situation, and we are looking for independence," says Ms. Eu. "There is simply no such intention [among the people] at all."

While Ms. Eu says fears of a separatist movement in Hong Kong are unfounded, she believes China's authorities look at the situation in Taiwan, where some politicians endorse the idea of independence, and apply it to Hong Kong.

The United States and Britain have criticized Beijing for delaying democracy in Hong Kong. But Chinese Foreign Minister Li Zhaoxing recently argued that this is hypocritical. He says foreign powers such as the United States never pressured Hong Kong's British colonial government for democracy - so why should they be critical of Beijing's policy now.

"Do you think Hong Kong was democratic under British rule? Did the British raise concerns about that? Did the Americans raise concerns? No," says Mr. Li. "Why don't you take a look at this double standard?"

Britain handed Hong Kong back to Chinese sovereignty in 1997 in a peaceful and smooth transition. Hong Kong's free economy, its Western-style legal system and civil liberties - all a legacy of British rule - were to be preserved under a policy known as "one country, two systems."

The policy gave the local government a high degree of autonomy. A new mini-constitution was put in place to guard freedoms. But the document, known as the Basic Law, also called for gradual political reform with the ultimate goal being universal suffrage.

While the Basic Law opens the door to change, it does not stipulate how the changes may take place, or who will initiate the change.

Political scientist Joseph Chan of Hong Kong University says the NPC's decision weakens the position of Hong Kong's administration and lawmakers. Mr. Chan says China has now subjugated the local Hong Kong government.

Like Mr. Chan, many analysts agree that it seems clear that Beijing will now be in charge of guiding policy on Hong Kong's reforms.